FEATURE28 November 2013

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AI Impact

Algorithmic trading is speeding up the ad buying process – fuelled by the mass of data about online consumer habits. Brian Tarran reports.

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In a data-driven world, the algorithm is king. From the search results you get through Google, to the product recommendations made by Amazon – even to the distribution of police officers in certain American cities – algorithms decide it all. They’re a set of instructions that computers use to solve problems: if x equals y, then divide y by z. The output of these computations might determine anything; from how many shares of a particular company to buy, to whether or not a new album is likely to reach the number one spot.

Algorithms are particularly prevalent in financial trading. Scott Patterson’s new book Dark Pools documents the creation of what he describes as “a fantastic Blade Runner trading world few outsiders could imagine, a worldwide matrix of dazzlingly complex algorithms, interlinked computer hubs the size of football fields and high-octane trading robots guided by the latest advances in artificial intelligence”.

It’s a story that’s equal parts fascinating and ...